By Jeffrey Steele, Contributing Writer
When the Mid-Year Apartment Strategies/Finance Conference and Board of Directors meeting of the National Multi Housing Council (NMHC) convened three weeks ago in Palm Beach, one position met with considerable accord. With renting likely to become more popular with Americans from retirees to Echo Boomers in the years to come, it’s time the United States adopted an updated housing policy granting multifamily living increased respect, attendees agreed.
Observers from both sides of the political spectrum at the conference concurred on the need for ongoing federal intervention in the U.S. housing market. Cindy Chetti, NMHC senior vice-president of government affairs, brought these arguments into clearer focus.
Chetti tells MHN that the nation is on the cusp of a new debate about home ownership versus rental. The gravity of that debate is underscored by the nearly 6 million new renting households forecast to be formed in this country between 2008 and 2015.
“You have the housing crisis that has created challenges for the single-family housing market,” Chetti says. “There was overbuilding of single-family homes in the 1990s and last decade, but that wasn’t true in multifamily. For example, if you look at Freddie Mac and Fannie Mae multifamily portfolios, versus Freddie and Fannie single-family portfolios, the former have made money for the government, and their defaults have been less than 1 percent. Multifamily didn’t overbuild and didn’t over-leverage. And now some housing experts predict there will be an actual shortage of apartments as early as 2012.”
The NMHC has for years emphasized its conviction that not everyone should own a home, and that the United States should establish a more balanced housing policy, recognizing the benefits of rental as well as home ownership, Chetti says.
“Right now, it’s a little skewed, with the tax code supporting home ownership. We’ve maintained for years there’s a rationale for looking at a more balanced approach,” she adds. “Renters should be treated the same as home owners. It’s a choice. You shouldn‘t be treated differently for that choice.”
As Congress examines the nation’s budget deficits and its tax code, it will have to make difficult choices, Chetti says. The entire budget will have to be scrutinized, including FHA programs and low-income tax-credit programs, which are critical in helping ensure multifamily properties are designed and built.
Eighty percent of the nation’s housing programs and tax expenditures go to home ownership, despite the fact that two-thirds of U.S. households formed between 2008 and 2015 will be renting households, Chetti notes. “As Congress makes decisions on how to cut the deficit and reform the tax code, there needs to be rebalancing of our housing policy that makes rental housing a priority.”